Tag Archive: holistic

What do UPS, Shamrock Foods, Amazon & a 3PL Have in Common?

March 14th, 2019

In touring multiple facilities, ranging from package shipments to cold storage food service delivery to the e-commerce behemoth to 3PL organizations, it despite the conversations that take place about labor costs and other daily concerns, the #1 concern across the board is transportation costs. The numbers support this sentiment. According to CSCMP, transportation costs are 65% of total logistics spend.

Logically, it also makes good sense. No matter your business, materials, parts sub-assemblies and/or products need to arrive at your facility. Often, especially in industries such as aerospace, the parts make multiple trips around the area (unless you are unlucky enough to require sourcing outside of your local area) for outside processing services such as anodizing and painting. Lastly, every work-in-process part or finished good must go to the next stop along the way to the customer such as a final assembly customer, your distribution center, your customer’s distribution center or the end customer. That makes for quite a lot of transportation, often involving multiple modes of transport from air freight to ocean freight to rail to trucking.

Given these alarming statistics about transportation costs, the question becomes: What can we do to proactively manage these costs as well as reduce the impact on the environment? After listening to several experts on these tours and experts from Georgia Tech, APICS (learn more about the critical importance of logistics in our APICS-IE CLTD, certified in logistics, transportation and distribution certificate program) and CSCMP SoCal (at the state of the industry event), a few ideas emerged.

  1. Collaborate with strange bedfellows:As recently published in an I’ve Been Thinking article, collaborating with strange bedfellows can achieve 1+1+1 = 25 minimally. In terms of transportation, there is no doubt maximizing the space used in your truck, container or plane is vital. Why not collaborate with another business to increase your utilization?
  2. Take the holistic or systems view: It is quite challenging to see the forest for the trees as the old slogan goes. We have all been there! I have worked with clients for extended periods of time and found myself with this same issue.  So, I have to deliberately shake it up to maintain the systems or bird’s-eye view. For example, don’t worry about saving a few pennies on a non-essential element of your transportation infrastructure when you are missing the key point that your mix of modes of operation or something like that is costing you millions.
  1. Utilize technology that focuses on the critical transportation factors: In every case (at every tour, event and in every conversation), leveraging technology where it makes sense came up. Certainly, artificial intelligence is the new craze since it has the potential to transform entire industries including logistics. However, robotics are being considered even in industries such as 3PL where they never were previously due to the nature of managing different customers and products. Of course, IoT is prevalent in the world of logistics and transportation as well as topics such as alternative fuels and automation. And what about the basics of a solid ERP system and TMS (transportation management system)? Don’t panic over the horror stories. Contact us if you want to overcome them.
  1. Be customer friendly:Interesting how often being customer friendly arises, no matter the industry or size company (small family owned to private equity backed to large complex organizations).  With rising truck rates and a shortage of drivers, if you aren’t a preferred shipper, you might just be out of luck no matter how much you spend. What does it take to be a preferred shipper? It depends on your business, carriers, locations and more. However, it starts by thinking about what is important to your carrier (not you). Are they looking for flexibility? A quick turnaround time? Fast payment? Good treatment for their drivers?

Since transportation costs are, at minimum, 65% of your total logistics spend, it requires further thought. With the vast amount of technology options available, the best approach is to start with your foundation (your ERP system) and ensure it is stable. Once you have a scalable base, find the ‘right’ technology for your situation to maximize the value of your logistics infrastructure. However, remember the 80/20 goes back to people. What are you doing to develop strategic partnerships and to ensure you are customer friendly and a preferred shipper? Given the impact, don’t leave this to chance or make assumptions. We all like to think we are preferred but what can we do to take it an extra step further?

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What’s Ahead in Technology?

January 30th, 2019

To think about what’s ahead in technology, it is important to put it in perspective with what’s ahead in business.  Read our article, “What’s Ahead in Business?” for details on the key trends impacting business:

  1. Importance of the customer experience
  2. Taking the holistic view has become a “must”
  3. Volatility is the new norm
  4. The coming power of manufacturing and supply chain

What’s ahead in technology lines up with these same themes. In order to achieve scalable, profitable growth, technology is an important enabler. The most relevant technology trends include:

  1. ERP Upgrades – More and more companies are realizing that their system infrastructure must keep up with business requirements and customer expectations. As tough as an ERP upgrade can be, it is one of the only ways to make the leap from manual, labor-intensive processes to providing a superior customer experience efficiently.
  2. E-commerce/ Customer Portals – Amazon. Alibaba. Customer collaboration. Need we say more?
  3. Business Intelligence & Data Analytics – We are overwhelmed by mountains of data. We are so anxious to gather data yet we don’t seem to have the appropriate information at our fingertips when we need it. That’s where data analytics comes into the picture. Beyond that, predictive analytics is gaining steam.
  4. Artificial Intelligence – Even my Mom counts on Alexa! In addition, who wouldn’t want a car that self corrects? Predicting customer patterns and behaviors is becoming more important. AI is set to transform many industries over the next several years.
  5. IoT– Smart factories. Smart homes. Connected devices and machines. According to NEWGENAPPS, 60% of global manufacturers will use analytics data tracked using connected devices to analyze and and optimize processes.
  6. Robotics & Automation – Robots may not be taking over the universe tomorrow morning, but they are working hand-in-hand with people to achieve many benefits – improve safety, increase speed and consistency, improve customer satisfaction, fill capacity shortfalls and and increase productivity.
  7. Autonomous Vehicles – Beyond self-driving cars and trucks, autonomous vehicles are used widely in manufacturing and distribution environments.

Are you thinking about which of these technologies will support your business objectives?  Or which are likely to impact your industry?  Consider technology as a key part of your strategy and plans. If you’d like an expert to evaluate which, if any, of these technologies will be relevant to your business, contact us.

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What’s Ahead for Business?

January 26th, 2019

Thinking about our clients, colleagues and trade association/ trusted partner contacts from across multiple industries and company sizes, four overarching themes emerge in response to the question, “What’s ahead for business?”.

 

 

  1. The Customer Experience: It doesn’t matter whether we are talking about manufacturing, logistics, healthcare or services, the customer experience is of paramount importance. This is quite different from customer service! The customer experience relates to how the customer feels after interactions with you and your firm. Whether you achieved perfect OTIF (on-time-in-full) or not, if the customer doesn’t want to do business with you, you haven’t achieved a superior customer experience. What will you do to up the ante?
  2. The Holistic View: Although this is a common thread in our client conversations, it isn’t commonplace. Having a Holistic View has become a “must” as the global marketplace is more interconnected than ever before; systems and technology are more connected with everyday interactions; and, the customer and profit go hand-in-hand. Clients who address a singular topic such as running a kaizen instead of looking at the holistic view of what will dramatically improve their business performance will be left in the dust. Are you looking at what your executives or board are asking about or are you taking a step back to look at your business from the holistic view?
  3. Volatility is the New Norm: The stock markets and business performance are becoming less and less related to one another.  Yet, both are volatile. There is uncertainty in global trade, government shutdowns, the impact of artificial intelligence and robots, natural disasters like the California fires, what the disruptors such as Netflix and Uber will do next and much more. Are you thinking about how to create a resilient end-to-end supply chain?
  4. The Coming Power of Manufacturing and Supply Chain:No matter your industry, you better pay attention! For example, according to a Healthcare Finance article, by 2020, supply chain expenses will eclipse labor as the new number one cost in healthcare. Also, according to a Chairman at the City of Hope, the cure for several types of cancer is within reach but will be cost prohibitive unless manufacturers figure out how to produce in volume and less expensively. Certainly, Amazon is turning the world upside down, creating an entirely new relevance to the art of maximizing service, inventory and margins simultaneously. Re-shoring is on the rise, additive manufacturing is uniquely positioned to transform industries (customized, immediate products on demand) and bringing the customer closer to the source is a recipe for success. Do you still see manufacturing as outsourced to China or as a force?

Our most successful clients will be thinking about these trends to integrate into their strategy, their customer conversations and their employee and partner plans. Are you positioned to take advantage of the opportunities and avoid the risks? If you would like an expert to assess your situation, contact us.

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Your Supply Chain Shortlist for 2018

January 3rd, 2018

supply chain strategy

 

As we head into a New Year, it makes sense to take stock and think about your supply chain shortlist.  To get you started, we’ve developed a list of questions to ponder:

  1.  Do you consider your supply chain from the holistic point-of-view?  From cradle to grave or product inception to customer reception?  If not, you are selling your business short!
  2.  If you were to draw your supply chain for a new hire, would you start with your customer, your supplier or somewhere in the middle?   Why?  Do you inherently see that as your priority?  
  3.  Have you thought about the power of high-tech AND high-touch in your supply chain?  Unless you are considering progressive technologies to deliver superior products and services at higher levels of profit, you’re sure to be left in the dust!  On the other hand, if you aren’t collaborating with your supply chain partners, you won’t even be in the game to start.
  4.  Have you considered the power of alignment (of demand and supply AND all your departments) while simultaneously considering the power of deliberate debate and misalignment? Find a way to constructively achieve both to maximize business value.
  5.  Have you considered why Southern California is the new center of manufacturing excellence for supply chains across the globe? Stay tuned for my new book, The Coming Power of Manufacturing to hear more about it.